Mr Knight warns about a resurgence of inflation at a time when downside risks to global growth have increased. This creates a major challenge for central banks: if inflation expectations were to rise appreciably, monetary policy would have to respond. He also said that the extraordinary measures taken by central banks over the past year have helped alleviate the liquidity problems in interbank markets. But he warns that commercial banks have the primary responsibility to improve the management of their own liquidity risks. He underlined the importance of following through the FSF's recommendations for a wide range of concrete measures to make the financial system stronger and safer. At the same time, financial innovation must not be stifled; but the benefits that securitisation offers will be secured only when banks and others take the steps needed to restore investors' confidence in the process.